TMI Blog2020 (2) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... und Bakshi, AR For the Revenue : Shri Samir Tekriwal, CIT-DR ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER: The captioned appeals have been filed at the instance of the different Assessees against the separate orders of the Commissioner of Income Tax (Appeals) 12, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-12/375/ CC-2/2014-15, CIT(A)-12/336B/CC-12/2013-14 and CIT(A)-12/335B/CC-2/2013-14 identically dated 31/08/2015 arising in the assessment orders passed under s.153C r.w.s.153A r.w.s.143(3) and under s.143(3) r.w.s.147 of the Income Tax Act, 1961(hereinafter referred to as the Act ) dated 26/03/2013 and 31/03/2013 (in the case of Sagar Projects) relevant to Assessment Years (AYs) 2008-09, 2009- 10 2009-10 respectively. 2. Since all the appeals relate to the same issue involving identical facts and circumstances but to different assessees, hence the same are heard analogously and are being disposed of by way of this common order. 3. First we take up the assessee s appeal in IT(ss)A No.3/Ahd/2016 (in the case of Sagar Corporation) for AY 2008-09 as a lead case, wherein assessee has raised the following grounds of appeal: All the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A of the Act. In this case, books of account and documents were found and seized in the possession of M/s.Darshanam Life Space Pvt.Ltd. group. Thereafter, a notice u/s.153C r.w.s.153A(a) was issued. The assessee vide Question No.33 dated 24/08/2012 was asked to submit the details of deduction claimed u/s.80IB of the Act. In response thereto, the assessee has submitted as under: 1. The assessee is a partnership firm and the said firm is came in to existence w.e.f. 06/02/2007. The assessee firm has commenced its project of residential housing project in the year 2007-08 known as Darshanam Villa 1 2, of 33 43 residential housing units respectively, situated at Near Parivar Char Rastta, Waghodia Road, Baroda. 2. The assessee firm has acquired development right in the land bearing R.S.NO.724/1, 724/2 725 of village Bapod Dist.Baroda admeasuring 61108 Sq. feet for a consideration of ₹ 69/- per Sq.feet as per Sale of agreement dated 30/03/2007executed with Shri Jayntilal Dalsumhbhai Panchal, a landowenr and Shri Rakesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entered into in that case will not entitle the Developer to have the dominant control over the project and all the risks involved therein will vest with the landowner only. The interest of the Developer will be restricted only for the fixed remuneration for which he would be rendering the services. The decision in the case of Radhe Developers (supra) has not dealt with such situation. The proposition of law laid down in the case of Radhe Developers cannot be applied universally without looking into the development agreement entered into by the Developer along with the landowner. In the case of Shakti Corporation since the assessee has filed copy of the development agreement and crux of the agreement is that the assessee has purchased the land and has developed the housing project at its own, therefore, we are of the view that the assessee will be entitled for the deduction u/s. 80IB(10). The decision of the Hon'ble Supreme Court in the case of Faqir Chand Gulati (supra) will not assist the Revenue, as the agreement is not sharing of the constructed area. In other cases the copy of agreement since has not been submitted before us. If submitted, the terms and conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of time limit for payment of sale consideration as decided by the seller and no excess rate of sale consideration or extra amount shall demanded by the seller in any circumstances. (Refer clause no. 5 of the Sale of Agreement). d. The Purchaser (Developer) is entitled to obtain various permission or revised the plan layout as well as obtaining approval of said plan layout and construction permission from the local authority and expenses thereof shall be borne by the developers for which, the setter has to sign necessary documents / papers and cooperate to the Purchaser (Developers) to obtain such approval etc. (Refer clause no. 6 of the Sale of Agreement). 8. On the basis of above agreement, the landowners has given possession of the land for development and construction of residential housing scheme as per plan layout approved by the local authority and assesses firm has incurred all the expenditure for development and construction of the housing project including the following: i) Architect fees. ii) Development charges to be paid to the regulatory authorities for making availability of electricity connection charges paid to GEB, drainage water con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchaser has agreed to purchase the residential unit along with construction of residential house as per the design and the specification approved by the local authority. c) The construction is to be done as per the design and the specification details given in the brochure as well as approved plan layout obtained from the local authority. d) The purchaser i.e. the customer would not be entitled to the possession until complete payment is made to the assessee firm. e) Any extra work other than specified in the brochure is to be reimbursed / paid by the purchaser / customer in advance. From the above discussion and also on perusal of the various documents / approvals, Profit Loss Accounts, etc. it would be evident that the assessee firm has carried out the activity of development and construction of the housing project as an integrated activity which is the requirement of sec. 80IB(10) as the profit which is eligible for deduction is to be derived from development and building housing projects as per the other conditions specified. 9. In light of the above requirement, the meaning of the term 'developers / contractors' as observed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f land or territory by building or mining. Accordingly, it can be safely said that a person who undertakes to develop real estate by developing and constructing a housing project is an eligible undertaking; developing and building of housing projects within the meaning of section 80-IB(10) of the Act. In the present case in hand, the landowner has not made any conscious attempt to develop the property except ensuring their rights as landowner so that the sale value of the land could be realized to them as per the terms of 'Agreement to Sale' and the 'Development Agreement', The landowners, no doubt, have not thrown themselves into development of property. It is only the assessee who is developing the property. Throwing itself into the business of development and building of housing projects by taking all risks associated with the business by engaging architects, structural consultants, designing and planning of the housing schemes, payment of development charges, obtaining necessary permissions, approving plans, hiring machinery and equipments, hiring engineers, appointing contractors, etc. No doubt, the permission has been obtained in the name of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or enterprise referred to in sub-section (1)] The above explanation is inserted by the Finance Act 2007 and the explanatory note issued by the CBDT by Circular No. 3 of 2008 clarified as under: 34.2. The tax benefit was introduced for the reason that industrial modernization requires a massive expansion of, and qualitative improvement in, infrastructure (viz, expressways, highways, airports, ports and rapid urban rail transport systems) which was lacking in our country. The purpose of the tax benefits has all along been for encouraging private sector participation by way of investment in development of the infrastructure sector and not for the persons who merely execute the civil construction work or any other works contract. The incentive has all along been intended to benefit developers who undertake entrepreneurial and investment risk and not contractors who only undertake business risk. 34.3. Accordingly, it has been clarified by inserting an explanation that the provisions of section 801 A shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the said section. Thus, in a case where a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10) of the I.T. Act, and therefore, the claim of deduction as made by the assessee firm is to be allowed. 15. The assessee firm has not claimed any deduction u/s 80IB(10) of the I.T Act, in the return of income filed u/s 139(1) of the Act; 1961 in any of the assessment years. The assessee firm has now claimed deduction u/s 80IB(10) of the I. T. Act; in the years under consideration, in the income tax returns filed in response to notice u/s 153C of the I T. Act; as the assessee firm is fulfilled all the conditions for claiming deduction u/s 80IB(10) of the I.T Act; and assessee firm is eligible to claim deduction as per Income Tax Act; which is allowable as per law. 5. The Assessing Officer was not agree with the submission or contention of the assessee and made addition of ₹ 3,74,191/-. 6. Against the said order, assessee preferred first statutory appeal before the Ld.CIT(A) who confirmed the action of the Assessing Officer. 7. Now assessee has come before us by way of second statutory appeal. 8. At the outset, Ld.AR relied upon an order of the Coordinate Bench C passed in assessee s own case in IT(ss)A No.05/Ahd/2016 for AY 2010-11, date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of co-ordinate bench s decision in the case of Sagar Associates vs. DCIT (ITA No.448-552/Ahd/2013), this claim cannot be rejected merely on the ground that the claim has been made for the first time in 153C proceedings, and that it has to be, therefore, adjudicated on merits. 4. In view of the above discussions, and bearing in mind the fact that there is no adjudication on merits by the Learned CIT(A), we deem it fit and proper to remit the matter to the file of the Learned CIT(A) for adjudication on merits. Ordered, accordingly. 5. In the result, the appeal is allowed for statistical purposes in the terms indicated above. Pronounced in the open court today on the 17th May, 2018. 9. On the other hand, Ld.DR has fairly conceded that the matter is squarely covered by the order of the Coordinate Bench as stated above and he has nothing to controvert arguments of the Ld.AR. 10. Since in similar facts and circumstances, the Coordinate Bench has set aside the matter back to the file of Ld.CIT(A) holding that there was no adjudication on merit by the Ld.CIT(A). Accordingly, we remit this matter back to the file of Ld.CIT(A) to decide the matter afresh on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus. The addition of ₹ 15,68,000/- being erroneous in facts and bad in law is prayed to be deleted. 4. Your appellant craves the liberty to add, alter, amend or delete any or all of the above ground(s) of appeal. (b) In ITA No.08/Ahd/2016 for AY 2009-10, the assessee has raised the following grounds of appeal: All the grounds of appeal in this appeal are mutually exclusive and without prejudice to each other. 1. The Ld. CIT (A)-12, Ahmedabad has erred in law and in facts in confirming the action of the Ld. A.O. in denying the deduction of ₹ 38,62,286/-claimed u/s. 80IB(10) on the following grounds: i. The appellant has first time made claim of deduction u/s 80IB(10) in the return of income filed in response to notice us/ 148 and no claim of deduction u/s 80IB(10) was made in the original return of income filed on 21.07.2009 and the requisite report from the auditor in Form No. 10CCB was also not filed before the due date prescribed u/s 80AC r.w.s. 80IB(13) r.w.s. 80LA (7) or even before the time limit allowed for revised return for the year under consideration in response to notice u/s 148 of the IT. Act. ii. The appellant has no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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